Technical Highlights

AUDITING AND ASSURANCE

ISCA Issues Updated Audit Bulletin (AB) 3 Implementation Of Quality Management Standards

This audit bulletin contains frequently asked questions to assist firms in the implementation of the quality management standards.

AB 3 has been updated to incorporate FAQ 5.2.1 to clarify on the requirements over when engagement quality reviews are mandatory.

ISCA Comments On IAASB’s Exposure Draft: Proposed ISSA 5000 General Requirements For Sustainability Assurance Engagements And Proposed Conforming And Consequential Amendments To Other IAASB Standards

ISCA welcomes the development of IAASB’s new sustainability assurance standard, which will serve to enhance confidence and trust in sustainability reporting.

In our response, we highlighted areas where implementation guidance is needed to address practical application challenges, such as the application of materiality to sustainability information, which is wide-ranging with diverse user needs and expectations. Due to the relatively nascent state of sustainability assurance, we also provided recommendations on areas where requirements over risk assessment and fraud requirements can be tightened.

FINANCIAL REPORTING

ISCA Comments On IASB’s ED Annual Improvements – Volume 11

In general, we support and agree with the Board’s proposals in the ED. In addition, we have two suggestions in relation to the proposed amendments to IFRS 9 on the derecognition of lease liabilities – (i) suggested amendments to be made in IFRS 16 to be aligned with the proposed amendments in IFRS 9, and (ii) suggested clarification on when a change to the lease agreement is to be accounted for in profit or loss in accordance with IFRS 9 or as an adjustment to right-of-use asset in accordance with IFRS 16.

New Webcast On Forthcoming IFRS Accounting Standard For Subsidiaries

IASB has issued the first in a series of webcasts explaining the requirements in the forthcoming reduced-disclosure IFRS Accounting Standard for subsidiaries of parent companies that apply IFRSs. It gives an overview of the Standard and explains why IASB developed it, who are the subsidiaries eligible to apply the Standard and the benefits it will bring to subsidiaries and their parent companies, as well as the users of financial statements. The Standard is expected to be issued in the first half of 2024, effective for annual reporting periods beginning on or after 1 January 2027; early application is permitted.

IASB Member Ann Tarca Explains Proposed Changes To IFRS Accounting Taxonomy 2023

IASB has published a video featuring IASB member Ann Tarca explaining the proposed changes to IFRS Accounting Taxonomy. It includes introducing new elements for better comparison of narrative information, and new elements for financial instruments based on common reporting practice.

December 2023 Agenda And Meeting Papers Available

• Accounting Standards Advisory Forum (ASAF)
  The ASAF meeting was held on 4 December 2023. The topics discussed include Agenda planning and feedback from previous ASAF meetings, Primary Financial Statements, and Climate-Related and Other Uncertainties in the Financial Statements.

• International Accounting Standards Board
  For the IASB meeting held from 12 to 14 December 2023, the topics discussed include a summary of research and possible approaches for narrow-scope standard setting in relation to issues faced in accounting for Power Purchase Agreements, updates on various IASB projects including Rate-Regulated Activities and Climate-Related and Other Uncertainties in the Financial Statements.

SUSTAINABILITY & CLIMATE CHANGE

GRI Establishes Sustainability Innovation Lab In Coordination With The IFRS Foundation

GRI launched the Sustainability Innovation Lab (SIL) on 20 November 2023, in partnership with the IFRS Foundation as its Convening Partner. SIL is established to enable companies to meet their evolving sustainability disclosure requirements, fostering professional development, training, practical solutions and innovative thinking. It is based in Singapore and supported by offices throughout Asia initially.

November 2023 ISSB Update And Podcast Available

In this podcast, ISSB Chair Emmanuel Faber and Vice-Chair Sue Lloyd share on topics discussed at the Board’s November meeting, including ISSB’s first meeting at its Beijing office and its first Beijing International Sustainability Conference, as well as the launch of GRI’s SIL in coordination with the IFRS Foundation.

ISSB At COP28: Strong Support For The Work Of ISSB

On 30 November 2023, at COP 28 held in Dubai, United Arab Emirates, Asian Infrastructure Investment Bank, European Investment Bank, Inter-American Development Bank and European Bank for Reconstruction and Development confirmed their support for the work of ISSB.

Separately, ISCA has also committed to advance the ISSB climate global baseline by becoming a signatory to the declaration of support which was announced during Finance Day at COP 28 on 4 December 2023.